G

Guarantee

This is a legal commitment which means that the person or the company who offers the guarantee will repay the debt in case the original borrower fails to make the payments. In case of a personal loan, another person might offer the guarantee (usually a friend or family member of the borrower), while in case of companies, the directors might give guarantee. In case of companies in a group, it is possible that the companies guarantee each others loans. Many lenders ask for someone who can guarantee for the debtor, and borrowers might get loans with better conditions if someone can guarantee for them, because this adds extra safety to the lender that whatever happens, he will get the lent money back.